USD/JPY Price Forecast – US Dollar Testing 50 Day EMA

The US dollar has gone back and forth during the course of the trading session on Friday, as we continue to respect the idea of the 50 day EMA offering a bit of dynamic support. At this point, the market is more likely to bounce than not, mainly because there are a couple of support levels just below. The ¥108 level is an area where I would expect to see massive support though, as it is where we have bounced from and: science with the 38.2% Fibonacci retracement level. If we break down below the hammer that formed support at that region, then I think we go looking towards the 200 day and the ¥107 level.

USD/JPY Video 24.05.21

All things being equal, this is a pair that is moving on the differential in interest rates between the two countries. As the US starts to offer more yield, this pair will continue to rally. Nonetheless, it is also sensitive to risk appetite so pay attention to that as well if stock markets sell off drastically that can be negative for this pair as people go looking towards the safety of the Japanese yen. Regardless, my number one use for this pair is as a “measuring stick” of the Japanese yen itself. If this pair rises, I have found quite a bit of value to be had in other pairs such as the GBP/JPY pair and the CHF/JPY pair. If it falls, then that can give me an idea as to how some of those other pairs may behave. As far as trading in this particular market, it is a bit choppy, but it certainly looks as if we are more likely to bounce than not.

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